Purbeck guarantee insurance applications rise 62%

Purbeck Personal Guarantee Insurance recorded a 62% annual increase in applications in the third quarter of 2026, while the average loan backed by a personal guarantee reached £346,105. The figures point to greater personal exposure among the business owners seeking cover through the provider, rather than measuring borrowing across the UK market.

Demand also strengthened against the previous quarter, with applications up 9%. The quarterly figures, reported by Elite Business, show owners seeking protection for larger commitments as they borrow for both everyday funding needs and longer-term business plans.

What happened

September was Purbeck’s strongest month for applications since its records began. Volumes were 69% above September 2025, taking applications for the first nine months of 2026 to 22% more than the company received throughout the whole of 2025.

The average guaranteed loan was 33% larger than a year earlier. Average insurance cover requested rose more slowly, increasing 27% to £194,274. Those measures describe different amounts: the underlying borrowing and the protection applicants sought against their personal guarantee exposure.

Larger requests accounted for a greater share of business. Applications for cover exceeding £450,000 represented 13% of the third-quarter total, against 5% a year earlier. Purbeck said the aggregate value of lending supported by personal guarantees within its data more than doubled over the year.

Working capital was the leading borrowing purpose, representing 38% of applications. The number of applications associated with working-capital loans increased 68% year on year, showing that immediate operating needs remained a substantial part of demand.

Cash collection is also the subject of a separate proposal to give large businesses a 60-day payment limit. Purbeck’s figures do not identify late payment as the cause of applicants’ working-capital requirements.

Other borrowing purposes grew faster from their respective bases. Applications connected with development finance increased 114%, those for refinancing rose 109%, and those supporting growth initiatives climbed 98%. The figures therefore cover funding for investment and changes to existing borrowing, as well as day-to-day costs.

The background

A personal guarantee gives a lender recourse to a director’s own assets if the business cannot meet its borrowing commitments. That means a company financing decision can also put personal savings or a family home at risk.

The data concerns applications for insurance against that exposure. It is not a count of all personal guarantees signed, completed loans or insurance policies issued across the UK. Its scope is narrower than the wider small-business funding market, which also includes the activity covered in the report on record summer start-up lending.

Construction stood out in Purbeck’s sector breakdown, with applications rising 113% year on year. Working capital accounted for 46% of applications from construction businesses, a higher proportion than across the provider’s applicants overall.

Among manufacturing applicants, 51% were borrowing for working capital. That compared with 39% a year earlier, making operating finance the purpose behind more than half of applications from that sector.

The applicant mix also changed. Applications from women increased 86% year on year, compared with 60% among men. Women represented 12.8% of applicants, up from 11.2% in the equivalent quarter of 2025, although they remained a small minority of the total.

What people are saying

Todd Davison, Purbeck’s managing director, said the figures showed owners increasing both their use of borrowing and the amounts involved. His concern was the connection between those business commitments and the household assets potentially supporting them.

“That is a lot of family homes and savings standing behind business plans,” Davison said.

The personal exposure adds another issue for directors assessing a financing proposal, alongside the company’s intended use of the money. It is a specific governance question within the broader debate about encouraging SMEs to establish boards earlier: who carries the liability if a business plan cannot be funded through to repayment?

What happens next

For directors considering a guarantee, the checks before signing include establishing the amount covered and whether the lender could pursue them for the full debt alongside other guarantors. Sharing a guarantee with other people does not remove the need to understand the individual commitment.

The terms governing release from the guarantee also need examination. Government guidance on personal guarantees provides further information, while the central assessment for an owner remains the amount they could personally owe if the business stopped paying, whether the loan funds expansion, refinancing or working capital.